Within two months of Competition Commission holding it guilty of abusing its dominant market position with subsidised and unfair pricing,leading stock exchange NSE today said it will start levying charges for currency derivatives trading from August 22. However,the National Stock Exchange (NSE) would still challenge the order of Competition Commission of India,which on June 23,2010 imposed a Rs 55.5 crore fine on the country's largest bourse for abusing its dominant market position and asked it to stop unfair pricing practices. In its order passed pursuant to an inquiry after a complaint filed by rival exchange MCX-SX,CCI said NSE's move towards subsidising its services was at the cost of rivals. MCX Stock Exchange (MCX-SX) welcomed the decision by its rival bourse and said it was a very positive development for the currency derivatives market. MCX-SX has been saying that it was not being able to levy a charge despite suffering huge business losses,as NSE was not charging for the product. Sources said that MCX-SX would soon decide on its transaction charges,while no immediate comments could be obtained from United Stock Exchange - the third player present in this market. NSE said it had earlier waived the charges for thebenefit of the market and the consumers,and all market players - including exchanges,members and consumers have benefited from the move. While NSE would be challenging the CCI order,it decided to levy the charge out of respect for the Commission. The CCI had felt that NSE should levy a charge and we are abiding by that suggestion,an NSE official said,but asserted that the exchange would still challenge the CCI order. The NSE commenced currency derivatives trading on August 29,2009,becoming the first bourse to offer this product. However,it has not levied any charge for this till now. Trading in currency futures segment has seen a rapid growth ever since its launch and the daily average trading volume has crossed Rs 18,000 crore,from a turnover of Rs 291 crore in the first day of trading on August 29,2009. NSE said it has decided to levy the transaction charges "in deference to the order of the Competition Commission of India against NSE and without prejudice to the rights and contentions of the Exchange in the matter." Besides transaction charges based on total turnover value,of up to Rs 1.15 per lakh in currency futures and of up to Rs 40 per lakh in options market,NSE has also asked its members to contribute for its Investor Protection Fund Trust. NSE would levy an advance transaction charge of Rs 50,000 per member per annum and would charge admission fee of Rs one lakh for its existing members and Rs five lakh for others.
